Posted by Hilka Klinkenberg on Wed, Nov 04, 2009 @ 08:15 PM
The dollar is down, and it may continue to decline even further…by how much depends any number of different models from the Organization for Economic Cooperation and Development (OECD), the Bank of Intercontinental Settlements (BIS), The International Monetary Fund (IMF), or the IntercontinentalExchange dollar index, among others. While that may be bad news for importers into the USA, it should present a golden opportunity for American exporters.
Unfortunately, that is not always the case. Over the years, I delivered many speeches on cultural issues to trade groups, and the response was always the same: “We don’t have the time or the money for that. We have to put all our 
resources into our marketing and advertising.” But how can you create a marketing plan if you don’t know your market? You can’t do what you always did and expect the same results you always got once you enter another culture.
Before you even consider going into new markets, there are any number of issues to consider:
- Is there actually a market for your product? Price alone is not the determinant. Cultural values and tastes can be the deciding factor in whether your product…and your marketing/advertising campaign…will be successful.
- Once you have determined that your product or service is a good fit, are there any changes that need to be made, for example in sizing for the Asian market or packaging and labeling for the Canadian market? Canadian labeling laws have deterred many American companies from entering the French-Canadian market.
- What are the barriers to entry in that market…tariffs, government regulations, infrastructure and transportation, climate, political or economic issues?
- Do you need a local ‘partner’ or a local representative? If so, what is involved in finding the right contact, making the connections and developing a profitable relationship?
- How will you be paid and how can you protect yourself from further fluctuations in the exchange rate?
Some of these points are obvious; some may be handled by your lawyer or accountant…or even the Department of Commerce. It is most often the little things, the cultural things, though, that derail what should be a lucrative export venture. Jack Brown’s article on the little mistakes major advertisers have made in new markets is a beginning. Watch for future whitepapers on some of the more challenging cultural risk issues exporters confront in their marketing and advertising plans.